When the banging woke Adrian Nugent and his family at 1 a.m., his first thought was that someone had broken into his home on Tompkins Street in Syracuse's Tipperary Hill neighborhood.

After a few minutes of nervous investigation with a flashlight, Nugent realized that the racket had come from the vacant house next door. He walked over to find his former neighbor's friend passed out drunk on the stoop. The man had apparently forgotten that the bank had foreclosed on his buddy after a messy divorce, leaving the house locked and empty.

Nugent would learn firsthand what several national studies have confirmed: That a single vacant house can drag down a whole neighborhood, and that once restored, that same house can become a focal point of neighborhood pride.

And that's just one vacant house. Syracuse has 1,033 vacant homes.

A study in Austin, Texas, found that streets with vacant houses had more than double the number of calls to police for drug, theft and assault crimes than other streets. A study in Philadelphia, Pa., found that occupied homes within 150 feet of a vacant house lost more than $7,000 in value and that the values of homes more than a block away were dragged down as well. Nationally, 12,000 fires break out in vacant homes each year.

The vacant house on Tompkins Street has been rehabilitated by Home HeadQuarters using Syracuse Neighborhood Initiative money, and is now occupied by a young family.

"It's just top-notch," Nugent said of the work by Home HeadQuarters and the effect on the street. "We now have wonderful new neighbors who cut their grass and shovel the walk. We have a street of intact houses. It's lifted everyone's spirits.

"When the home was vacant," Nugent added, "everyone was thinking about leaving the neighborhood. Now, no one can imagine living anywhere else."

Nugent's experience illustrates an important lesson learned by Syracuse and other cities, according to Home HeadQuarters Executive Director Kerry Quaglia.

"It doesn't take long after one home is abandoned to have the 'for sale' signs pop up," Quaglia said. "You've got to move quickly to address the situation before an abandonment leads to neighborhood-wide disillusionment and disinvestment."

It's a fate that Tipp Hill has avoided. Other Syracuse neighborhoods haven't been so lucky. Many of the city's vacant houses have been condemned, then abandoned by their owners, who could no longer afford the repairs and found no interested buyers.

The vacant homes tend to be clustered in the city's poorest areas and are both a cause and consequence of poverty, Quaglia said. Areas with large populations of low-income people tend to have low rents and property values, making it difficult to justify investing in a property, which leads to its deterioration and eventual abandonment. That, in turn, erodes the equity people have in the surrounding homes and pushes those families deeper into poverty.

Experts say vacant homes are a problem in most Northeastern cities, but some have it worse than others.

Buffalo has between 15,000 and 20,000 vacant homes, as much as 17 percent of its housing stock, according to a study by the Buffalo News. By comparison, about 2.5 percent of Syracuse's residential buildings -- 1,033 out of 41,830 -- are vacant, according to Home HeadQuarters.

Buffalo firefighters battle about 150 fires in vacant homes a year, a particularly dangerous job because of the poor condition of the houses and because firefighters can't assume that kids or squatters aren't trapped inside.

Syracuse had between 12 and 24 vacant house fires a year from 2004 to 2007, according to Investigator Ken Heffernan . He said Syracuse has managed to keep the numbers down by investing 106 work hours a week into inspecting every vacant home in the city every Saturday. "It's a massive undertaking, but it has paid off by cutting down on the number of fires," Heffernan said.

Last year, Buffalo Firefighter Mark Reed was critically injured when a chimney in a burning vacant home collapsed on him, causing head injuries and leading to the amputation of his right leg. His mother is now leading a campaign to raise the nearly $200 million that's needed to tear down all the city's vacant homes.

The mayor of Buffalo has a separate plan to demolish 1,000 homes a year for five years, according to Deputy Commissioner for Economic Development Jim Comerford.

Meanwhile, the Buffalo News estimates that as many as 60 people a day simply walk away from their homes, even as high-end housing in the city's core booms. Comerford disagrees with the News' numbers, but nonetheless calls the situation "an epidemic."

Political and nonprofit leaders in Syracuse have long recognized the blight of vacant housing. Rep. James Walsh, working with the city of Syracuse and Home HeadQuarters, has directed tens of millions of dollars of Syracuse Neighborhood Initiative money during the last decade toward home rehabilitation and demolition.

Even with that investment and more than 300 demolitions a year, the vacancy rate grew in the 1990s, according to the U.S. Census.

There are signs the investments are starting to pay off, and new initiatives starting also may help Syracuse turn the corner.

In the last six months, for instance, the number of vacant residential structures fell from about 1,300 to just over 1,000, partially due to several large demolitions, such as the razing of the Shady Willows Estates apartment complex on Onondaga Creek Boulevard.

Meanwhile, nonprofit agencies have been snatching up homes to rehabilitate since Syracuse started a program last year of selling abandoned, tax-delinquent homes to nonprofits for a dollar.

And Mayor Matt Driscoll is on the verge of expanding the program to allow for-profit investors to get in on the action.

Driscoll has been working on a pilot program where the city would seize about 30 tax-delinquent, abandoned properties and then issue a request for proposals seeking developers who would rehabilitate the homes. To qualify, the developers would have to have their taxes paid on their other properties, be free of code violations and have a history of rehabilitating homes, said Driscoll, who will expand the program if it works.

In exchange, the developers would be offered the homes for only $1. They would be given a detailed financial plan for rehabilitating the homes prepared by Home HeadQuarters and the Community Preservation Corp. They would be offered financing from the corporation. And they may even qualify for "gap financing" from the city -- essentially grants or loans to help close the void between what the property will cost to fix and what it's worth.

Driscoll plans to announce the plan, and expand on how it would work, at his State of City address on Wednesday.

Both Driscoll and Common Councilor Kathleen Joy, a real estate lawyer, said interest has been high among investors who have learned of the plan.

"The nonprofits have done a tremendous job," Driscoll said. "But to really tackle this problem, we need to unleash the power of private investment and engage the developers."

Driscoll said he thinks the incentives the city will offer will make even the worst neighborhoods in the city attractive to development. And he said the city's ability to bundle houses will prevent developers from "cherry picking."